Employers: What to Expect When an Employee Sues You
Employment lawsuits are the equivalent of a root canal. No one likes them. They give you mild anxiety. And often they are a result of issues that an employer was aware of but put off addressing. Why? Because employers are busy human beings who don’t operate on a premise they are going to get sued. However, employment lawsuits are almost always settled. This post is to outline what an employer should expect when an employee sues them.
Take a deep breath. Continue reading.
The Stages of Grief
I am not a psychologist, but I have dealt with enough cases to identify the stages of litigation grief.
When an employer gets a demand letter from the employee’s attorney or is served the lawsuit it is a little traumatic. You have a feeling this was going to happen but hoped it wouldn’t. Or you are completely blindsided. Your first thought is you are going to lose everything. You want to immediately negotiate with the employee and throw money at them to get it to go away. A lot of feelings and thoughts are speeding through your mind. Most of your fears are unfounded.
Before I dive deeper into the positive side of this blog, just know, this lawsuit is not the end of the world. The employee and their attorney do not benefit from you losing everything. That being said, you do need to be proactive and hire an attorney immediately.
The plan to call an attorney is the first sign of hope. You believe help is out there and it is. I give my clients the same speech “you are in this, it is not going to feel good, but we will get through it.” Hiring an attorney is not a get out of jail free card but it does begin to mitigate your degrees of losing. There is a method to my madness and an art to my approach. I do the heavy lifting of dealing with opposing counsel- the big bad monster keeping you up at night.
After you hire an attorney and feel someone is in your corner you then get anxious. Much of litigation is not in the employer’s control because the events that lead to the lawsuit are already done. What happened has happened. A little paranoia sets in that other employees are going to do the same. Sometimes that does happen if an employer does not have an attorney and settles too early. This signals to other employees you have money and will just give it away.
Litigation is often very slow. Cases can take several months to a few years to settle. Time does not necessarily make them any more expensive. It is just the ebbs and flows. I let my clients know there may be months of inactivity in a case. This gives employers anxiety because they want instant gratification. However, that is not going to be the case.
The attorney takes on the workload to address the allegations. As mentioned before, the cases are slow. As an employer, you just keep going with your operations. You talk to your attorney about making changes for better employee management. However, business will resume as usual. You don’t necessarily forget there is a lawsuit, but you lose a lot of the panicky feelings you have from the initial shock.
A Little More Anxiety
Settlement negotiations come around. Negotiations can happen at any time depending on your attorney’s case strategy. Usually the parties go to mediation. Settlement is when things feel “real.” Money is now on the table and the case is the closest to being over.
The case settles. An amount is agreed upon. The employer now knows the resolution of the case. There is a long settlement agreement. Once the settlement amount is paid in full the case is dismissed. By this time you and your business is stronger and better situated to avoid lawsuits in the future.
The Stages of Litigation
Now that you are emotionally preparing yourself for this experience, here is what the process looks like. This is not going to be the case for all lawsuits, but most of them.
Demand Letter/ Complaint
Sometimes an employee’s attorney sends a demand letter before filing a lawsuit. This letter outlines the laws you have allegedly violated and demands you pay a sum of money. The letter sometimes has a draft complaint with it. This is the lawsuit that would be filed if the case does not settle. As soon as you get this letter contact an attorney. Anything said or given to the employee’s attorney without talking to your own attorney first could increase your liability. I advise people to not turn over any documents to an employee’s attorney before talking to your own.
If a lawsuit is filed, you get served and have 30 days to respond to the lawsuit. You must act quickly to avoid a default being filed against you.
Hiring an Attorney
As soon as you are served a lawsuit you should talk to an attorney. An attorney will be able to read the complaint and see if there are any defects worth challenging and if so can challenge them. If no defects, an attorney will file an answer reserving your right to certain defenses. An attorney will also be able to figure out if there is any leverage to help you in the case.
Hire an employment attorney you feel comfortable with. I cannot stress this enough. Hire the attorney you can be candid with. That you sense has empathy for your cause and does not scold you. It makes it so much easier to get through a case when you relate to your attorney.
Once you hire an attorney gather all the employee’s records and compile a list of witnesses you think would be for and against you. I send my clients a questionnaire to gather pertinent information up front.
The next step in a lawsuit is discovery. Each side will ask questions and demand documents. Depending on the case there may be depositions taken in which an employee, employer or witness is questioned directly by an attorney. The discovery is vital in determining the validity of the allegations and the liability exposure the employer has. This step is the longest and often most expensive because of its importance.
Once the discovery is done both sides have a sense of the case’s value. This is when the parties either exchange settlement offers through their attorneys or they go to mediation and try to settle there. There are free mediations through the Los Angeles courts called Mandatory Settlement Conferences. The parties may also go to a private mediation, in which a retired judge familiar with employment law helps the parties settle. There are pros and cons to both approaches and your attorney will go over that with you.
I don’t discuss trial in this post because it is very rare an employment case goes to trial. When the parties all agree on a settlement it gets drafted into a long agreement and signed. Thereafter the case is dismissed in court if the parties meet their obligations under the agreement. Usually when the employer pays the settlement amount in full. It is done.
Employment lawsuits are expensive learning curves. There are billboards all over Los Angeles encouraging employees to sue their employers. If you are an employer who is getting sued rest easy knowing you are not the first and will not be the last. Lawsuits are not stress-free, but they are not meant to destroy your hard earned efforts.
I say this a lot and feel no shame, Los Angeles employers should talk to an attorney when they don’t know what to do or sense something is off with an employee. There is no way to guarantee an employer will not be sued, but there are ways to prevent lawsuits or have strong defenses. If you are a proactive small business or an employer in Los Angeles call or email me about specific employee issues 818-306-0686 | firstname.lastname@example.org
The information in this post is for general information purposes only. Nothing on this post should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.